Social scalability was a key factor in Bitcoin’s success, and it may be Ethereum’s greatest opportunity for the future.

At its core, social scalability is the ability of a system to engage as many people as possible and allow them to benefit from it. This very property is one of the main reasons crypto has grown into a $2.9 trillion asset class. In this article, I’ll unpack what social scalability means and why it’s so crucial.

In 2017, Nick Szabo published “Money, Blockchains, and Social Scalability”, framing Bitcoin as a social breakthrough. While most people saw crypto primarily as a tech innovation and focused on technical scalability, I found Szabo’s viewpoint far more compelling. Technical scalability does play a role, but it’s not the main driver. In the long run, the most successful cryptocurrencies will be the ones that deliver the most utility through credibly neutral systems—those capable of scaling socially.

1. Bitcoin’s Social Scalability

Bitcoin was the first credibly neutral, internet-native store of value. Credible neutrality refers to being fair, unbiased, and resistant to control by any small group. While often rooted in technology, credible neutrality is ultimately a social construct, built on countless subtle dynamics that shape trust.

Bitcoin’s neutrality wasn’t given—it was earned over time. It emerged from grassroots origins. Launched as open-source software, anyone could read, run, contribute to, and own it on a level playing field. Its launch was fair, with no insider allocations, no celebrities, corporations, or nation-states involved. The rules were set from the beginning and haven’t changed. The community discussed everything openly on forums like Bitcointalk. If you want to understand its ethos, go read Hal Finney’s early posts.

Bitcoin’s credible neutrality and utility were the catalysts that kickstarted the broader crypto industry. It began as a niche experiment from a pseudonymous creator named Satoshi, with no insiders, no central jurisdiction—just a new kind of product for the world. Today, it’s a $1.7 trillion asset adopted by some of the largest governments and corporations as a store of value. The Bitcoin protocol remains extremely resistant to change, which is part of why people continue to trust and adopt it.

Bitcoin’s rise has been remarkable. However, early cultural choices—like focusing strictly on money—have limited the ability for developers and companies to explore broader applications. Bitcoin maximalists have long argued that Bitcoin’s potential is limitless, but decentralised systems could offer far more freedom and innovation beyond just currency.

2. Is Social Scalability Still Relevant?

Social scalability helped Bitcoin thrive—but in 2025, every investor must ask: does it still matter?

Today, four of the top nine cryptocurrencies by market cap—XRP, BNB, SOL, and TRON—are essentially corporate tokens. Together, they account for over $312 billion in market value.

These tokens are backed by strong narratives but lack credible neutrality. They were launched by small teams in known jurisdictions (Silicon Valley and China), with over 50% of tokens allocated to insiders (founders and VCs). Their growth relied heavily on centralized marketing, lobbying, and top-down initiatives. These protocols haven’t yet proven resilient, secure, or robust against single points of failure. They made aggressive trade-offs in favor of performance, at the cost of decentralization.

Now, let’s talk about their utility. While some argue these chains are useful, they haven’t yet sparked truly novel use cases or widespread adoption. Regardless, they’ve seen enormous success. It’s tempting to conclude that narrative—and not social scalability—is what matters. If you can craft a compelling story and get enough people to buy into it, maybe that’s all it takes.

Still, I believe social scalability is essential over the long run. I think it will drive over $2 trillion in value creation in the next decade. That’s why we care. If you’re playing short-term games, I get why you’d disagree. But I encourage you to zoom out and take a longer view.

Time will tell, and things can change. But if you agree that social scalability is critical—and you look at the facts—it becomes clear that only two cryptocurrencies combine credible neutrality with enough utility to sustain long-term social scalability: Bitcoin and Ethereum.

Bitcoin dominates the crypto space today, but Ethereum may have even greater potential when it comes to social scalability. Here’s why:

3. Ethereum’s Credible Neutrality

Much like Bitcoin, Ethereum has exhibited credible neutrality since its inception. Although Ethereum doesn’t share Bitcoin’s “fair launch” legend, only 9.9% of its initial token supply was allocated to insiders. Anyone in the world could acquire ETH simply by sending BTC to the ICO address—no special deals for VCs, no involvement from celebrities, corporations, or governments.

Ethereum also began as a Proof-of-Work (PoW) chain and remained PoW-based for its first seven years, helping to ensure a more equitable token distribution before transitioning to Proof-of-Stake (PoS). Early on, participation in consensus and earning rewards didn’t require owning or buying ETH—only contributing computational resources. In contrast, PoS-native chains often see early large holders dominate rewards. This early structure allowed Ethereum to cultivate a broad and diverse set of stakeholders and enabled a wider demographic to earn rewards and participate in consensus today.

Ethereum’s founder is Vitalik Buterin. Critics sometimes argue that having a prominent and influential figure undermines Ethereum’s neutrality. However, those who have observed Vitalik’s leadership from the beginning understand he has fostered a culture rooted in transparency and credible neutrality.

You don’t see Vitalik pushing investment narratives on social media like many other prominent crypto figures chasing money, attention, and power. Over the past decade, he has been better positioned than almost anyone to pursue these things, but he hasn’t. Instead, he’s consistently championed values like censorship resistance, inclusivity, and openness—focusing primarily on setting long-term architectural and ideological foundations for developers.

In reality, Bitcoin and Ethereum are governed in fundamentally similar ways. Changes to either protocol require broad consensus across miners/validators, users, and developers. As a result, Ethereum’s upgrade pace has been much slower than some VCs would like—but this trade-off strengthens its credible neutrality and reflects a conscious design choice by Ethereum’s leadership.

Ethereum’s mainnet currently supports four actively maintained execution clients (Geth, Nethermind, Besu, and Erigon) and five consensus clients (Prysm, Lighthouse, Teku, Nimbus, and Lodestar). It has been prioritizing Client diversity and avoiding single points of failure. Meanwhile, Ethereum mainnet and its L2 ecosystem have become the most trusted platforms for builders and companies.

Today, Michael Saylor’s company holds a much higher share of Bitcoin’s total supply than Vitalik or the Ethereum Foundation hold of ETH. Bitcoin’s leadership has also leaned more into lobbying and political alignment—possibly a byproduct of its more mature trajectory and broader base of stakeholders.

Still, the risk that Saylor and political lobbying could undermine Bitcoin’s neutrality is real. In contrast, it’s encouraging to see Vitalik and the Ethereum Foundation resist the temptation to tailor narratives to market cycles. Ethereum’s leadership remains developer-focused, and the protocol has evolved well beyond the control of any single individual or entity. In fact, the most important figures in Ethereum’s future are likely to be developers whose names we haven’t heard yet.

4. Ethereum’s Practical Utility

The Ethereum Virtual Machine (EVM) dominates market share and benefits from powerful network effects. Since Bitcoin introduced the world to a credibly neutral, internet-native store of value, Ethereum has captured the majority of mindshare among developers and become the birthplace of nearly every major crypto-native innovation beyond money—DeFi, NFTs, prediction markets, decentralized social networks, decentralized identity, real-world assets (RWAs), stablecoins, and more. All of these new use cases promote EVM wallets and Ethereum as credibly neutral, internet-native stores of value.

Many of these innovations began on Ethereum mainnet but are now migrating to L2 blockchains built atop Ethereum. Developers and companies in crypto often prefer a trusted environment that offers greater control and economic efficiency—precisely what Ethereum’s L2 architecture provides. Those building on L2s or even L3s not only benefit more directly from the applications they create, but also enjoy Ethereum’s security, EVM’s network effects, and Ethereum’s role as a credibly neutral, internet-native value layer. Some L2s will thrive, while others won’t. For certain use cases, developers may eventually realize that mainnet offers liquidity advantages that L2s cannot match. Either way, it’s a net positive for Ethereum.

There’s been a lot of debate around whether L2s contribute to Ethereum’s value or cannibalize mainnet fees. For example, Standard Chartered recently downgraded Ethereum’s price target from $10,000 to $4,000, citing concerns that Coinbase’s L2 (Base) could eat into mainnet fee revenue. But this perspective misses the forest for the trees.

The primary value of L2s isn’t fee generation for the mainnet—it’s expanding EVM wallet adoption and reinforcing Ethereum as a credibly neutral, internet-native settlement layer. Usage across Ethereum’s ecosystem—including mainnet and L2s—reduces ETH supply, a strong feature that has made Ethereum more deflationary than Bitcoin. But fees are not the primary contribution of L2s and applications.

Ethereum holds a dominant market share in stablecoins, real-world assets (RWAs), and NFTs. It has become the primary ecosystem not only for new developers, but also for major institutions like JPMorgan, BlackRock, Coinbase, and Robinhood to tokenize assets. This trend began with crypto-native assets such as fungible tokens and NFTs, but it is increasingly expanding to include dollars, government bonds, equities, debt instruments, private credit, and real estate. Whether these activities take place on Ethereum mainnet or on L2s—and how much these L2s ultimately pay to the mainnet—does impact the amount of ETH that gets burned. However, even if all of this activity were to occur exclusively on L2s with minimal fees paid to the mainnet, the widespread adoption of these use cases still promotes Ethereum as a credibly neutral, internet-native store of value.

5. A $100 Trillion Opportunity

A credibly neutral, internet-native store of value is one of the biggest market opportunities in the world today. Gold’s total market cap is around $20 trillion, and the global M2 money supply is over $100 trillion. So, this is arguably a $100 trillion+ opportunity.

The cryptocurrencies best positioned to capture this opportunity are those that combine credible neutrality with practical utility—key ingredients for social scalability. There’s not yet a dominant narrative around this idea, but from both life and crypto experience, I’ve found that the strongest narratives often stray furthest from truth. Those who stay focused on core principles and resist the lure of short-term hype are the ones who will ultimately be rewarded.

Disclaimer:

1. This article is reprinted from [ForesightNews], and the copyright belongs to the original author [Nick Tomaino, founding partner of 1confirmation]. If you have any objections to the reprint, please contact the Gate Learn team, which will handle it as soon as possible according to relevant procedures.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

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